Select Committee on Work and Pensions Minutes of Evidence


Examination of Witnesses (Questions 420 - 436)

WEDNESDAY 13 DECEMBER 2006

LORD LEITCH, MS LOUISE TILBURY AND MR STEPHEN EVANS

  Q420  Mrs Humble: Your recommendation in your report is predicated on the assumption that the courses that are offering the basic skills training are adequate and up to the job, but there has been a recent DWP research paper that has highlighted the fact that some basic skills courses do not do very much for either the customer or the potential employer. You mention the QCA, but who would validate these courses to make sure that they were offering appropriate skilling to people and that it was not a waste of their time, if you are going to make it compulsory?

  Lord Leitch: The Commission for Employment and Skills has a role in this in looking at the results that are coming out from these, in addition to the QCA, so we are going to look at that. I agree with you—coming back to the point I made earlier—a number of courses that we use at the present time deliver no returns and need to be improved, so I agree.

  Q421  Justine Greening: I have a couple of questions on how we deliver better matching of skills and jobs locally. Before that I want to ask you a couple of questions on the macroeconomic picture that we talked about earlier. Lord Leitch, you talked about the fact in your report that migration generally has had a positive effect of helping to mitigate skills shortages and fill jobs that cannot be filled domestically. We know you have said 510,000 people from the accession eight countries have registered to work. Given that the Government initially said it expected around 40,000 or 50,000 people to come in, do you agree with me that that shows the Government had not got a clue about the actual level of skills shortage that this country was facing and had fundamentally misunderstood the challenge that our country had in skills shortages?

  Lord Leitch: I would say yes and no. Standing back again I would look at the economic performance of the country, and I think it has been a wonderful example of economic stability over the last 10 to 14 years. I think there has been a tremendous track record of economic performance. You can see world-class employment levels. All of those things I think are testimony to a very successful economic programme. Of course, predictions on immigration are incredibly difficult to do, but I think the economy has absorbed them well and has continued to flourish.

  Q422  Justine Greening: It seems to me that what we have seen with the accession eight countries proves that the Government had not understood the demand from British businesses and in doing so it has let down British business by, frankly, not putting in place skills training that provided the right employees with the right skills and has let down British business by not having a migration policy that even understood that skills was one of the key reasons why British business needed that economic migration. Do you also agree with me that it fundamentally, and perhaps most importantly, at the individual level, let down the 2.7 million people on incapacity benefit most of whom we know want to work, the million people on unemployment benefit and the possible one and a half a million looking for a job? Do you not agree that they have been fundamentally let down by this total misunderstanding by the Government of how big our skills shortage is?

  Sir Peter Spencer: I think I do disagree with you fundamentally. If you are going to stand back and look at the bigger picture—I will repeat how economically successful this country has been—I think it is a stunning performance: the fifth largest economy in the world, a paragon of stability in economic terms; high employment rates. We have seen some incredibly successful British companies.

  Justine Greening: We have, but we are also seeing rising unemployment now.

  Q423  Mark Pritchard: A seven year high.

  Lord Leitch: But you are still seeing employment at the highest it has ever been in generations at 75%.

  Q424  Justine Greening: Unemployment is at something like a seven year high.

  Lord Leitch: It is not my here role to comment on what has been done before. One of the areas that we looked at was should we try to analyse what has gone wrong, so do you go back 50 years or 100 years in terms of skills and education. We quote in the report Adam Smith in 1776 saying there was a huge problem in terms of the education establishments not delivering what businesses wanted. There has been a problem over the last 50 years in education—Stephen argues it is over 100 years—in terms of delivering what the economy needs, so I am not going to go into that detail.

  Q425  Justine Greening: Thank you for sort of answering my question.

  Lord Leitch: Disagreeing.

  Q426  Justine Greening: Well, disagreeing, but at the end of the day we had an opportunity.

  Lord Leitch: What was the opportunity? Can I ask you questions?

  Q427  Justine Greening: Absolutely, I am very happy to answer. I think the opportunity was that there was a clear skills shortage.

  Lord Leitch: Where?

  Q428  Justine Greening: Across the economy in a range of jobs from what we seem to understand in many respects.

  Lord Leitch: Look at what we have achieved: 21-29% in higher education; we have halved the number of people without basic skills; there have been very significant achievements.

  Q429  Chairman: Since 1997.

  Lord Leitch: I quoted since 1994.

  Q430  Mark Pritchard: I have somebody in my area in further education who says to me that there are some people leaving school who cannot even write an essay unless they write the essay in text language.

  Lord Leitch: I agree.

  Mark Pritchard: It is not that we are at the same skills level as we were 10 years ago.

  Chairman: Can we bring some order back to this. We do have a timetable and there are other people to ask questions. Justine, please.

  Q431  Justine Greening: I will just move on, but I will say I am frustrated because I think vocational education is very important and if we had made more progress on that in recent years we would have been better able to fill the skills shortage and give opportunities to people already here who desperately want them. I will move on to my questions. At the local level one of the things that has come out from some of the other evidence is that we can have all sorts of national programmes in the national framework but often the job opportunities are very locally driven, so in my area of London, for example, a lot of the opportunities come in the service sector, retail, but also construction. Do you think that the employment and skills programmes, funding for which is currently held by Jobcentre Plus and the Learning and Skills Councils, if we do go down the Cities Strategies route should be devolved right to that very, very local level to go with the Cities Strategies funding?

  Lord Leitch: The budgets for the Learning and Skills Councils?

  Q432  Justine Greening: Yes.

  Lord Leitch: I am not sure about that. I think that is something that has got to be taken forward in terms of the funding for LSCs. Of course, again, we are looking at budgets being demand-led. There is going to be Train to Gain and Individual Learner Accounts driving that. Instead of having big budgets, you will not have big budgets, the budgets will be driven by the demand through Individual Learner Accounts and through Train to Grain.

  Q433  Justine Greening: One of the other issues that have been raised is that there is this tension between having the national framework but allowing this flexibility in programmes so they can respond very, very locally. The Association of Learning Providers said that this could possibly lead to some sort of district anarchy in terms of what people are offered. How do you see balancing off those competing models of how we might deliver better skills and matching employees up with employers?

  Lord Leitch: Whenever you have devolution you have a risk of inconsistency. There has got to be a loose-tight framework, there have got to be certain things which are fixed and certain things which can vary. I am absolutely convinced we should be delegating and devolving as much as we possibly can, and I have mentioned in one of the principles the rights and responsibilities that individuals have.

  Q434  Miss Begg: This is the final set of questions you will be pleased to know. The next vehicle for New Deals is Building on the New Deals, but we have been told by other people giving evidence to this inquiry that Building on the New Deals is effectively dead, that the Department for Work and Pensions has not proceeded with it. If that is the case, do you think that the plethora of present New Deals should be replaced by a new generation of the next stage of New Deals but much more flexible programmes, ones that look at the individual person not at the disadvantage and look at what needs to be done to get them into a job rather than the separate New Deals that we have got at the moment?

  Lord Leitch: Thank you. New Deal has been an incredibly successful programme, as we all know. We have not evaluated Building on New Deal. What we are seeing is everything we are recommending will strengthen the New Deal. We think the New Deal should stay and be strengthened by the developments and recommendations that we are making.

  Q435  Miss Begg: You have mentioned Fair Cities already and you know about the Ambition project as well. What principles in both of those projects should inform the development of future welfare to work programmes?

  Lord Leitch: Oh, I think there is a clear lesson there. If you can join up the demand side with the supply side, if you can join up employers with the supply side, there are great results to be had from that, and I think that is what we have learned from that. If you can join up with employers, what we are recommending is at last bringing employers together on employment and skills. At the moment I chair the National Employment Panel which looks at employment and I feel very strongly that we should bring together employment and skills as well. I think that is the lesson we can learn from that. From my viewpoint, knowing Ambition and Fair Cities, you have got to have a programme which can get to scale. There is no point in having something which looks wonderful as a prototype and you can never expand it. I am convinced all the recommendations we have here can get to scale, the five million, the seven million people, can all get to scale. Those are the lessons I have learned.

  Q436  Chairman: Lord Leitch, can I thank you for what has been a very interesting and informative session. It is a dangerous precedent having witnesses ask us questions, I am not sure the Leader of the House would want us to take that up! Thank you very much, it has been really good.

  Lord Leitch: Thank you very much, it has been very stimulating.






 
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